Bloomberg Tax
Feb. 15, 2022, 3:49 PM

California Widens the Door for Income Tax on Internet Sales

Donna Borak
Donna Borak

California businesses will now face taxes on certain internet activities that were previously protected under federal law, according to guidance from the state.

The California Franchise Tax Board, which oversees income and franchise tax for the state, released a technical memorandum Monday effectively revising how internet activities are taxed under the Interstate Income Act, PB-86-272.

“In the decades since PL 86-272 was enacted, the way in which interstate business is conducted has changed significantly,” according to the board’s five-page memorandum.

The state’s move follows the Multistate Tax Commission’s August vote to update its own guidance on how states should ...